Rockford airport lands $40M jet repair and maintenance facility

Sunday

Aug 17, 2014 at 6:00 AM

By Isaac GuerreroRockford Register Star

ROCKFORD — A mammoth commercial and cargo jet repair and maintenance center will be built at the Chicago Rockford International Airport next year and will employ about 500 people within two years of opening in early 2016.

Airport Director Mike Dunn said the airport will build a $40 million, 200,000-square-foot maintenance, repair and overhaul facility — commonly called an MRO — to be leased by Wood Dale-based AAR Corp. the largest MRO operator in North America.

AAR CEO David Storch will join Sen. Dick Durbin, Gov. Pat Quinn, airport leaders and a host of state and local government and economic development officials at a 10:30 a.m. news conference Monday at the airport to discuss details of the project.

Rockford, Winnebago County and the airport will share half of the $40 million tab to build the facility. State and federal funds will cover the rest, Dunn said. AAR is expected to sign a seven-year lease with options for renewals.

It’s an economic development win that’s been years in the making and wouldn’t have been possible without Rock Valley College’s decision this year to build a larger aviation training center at the airport and triple the number of its students who graduate each year as FAA-certified aviation mechanics.

“This is UPS all over again,” said Dunn, referring to the airport’s United Parcel Service freight hub, which employs more than 1,000 workers and helped make the airport a regional economic cornerstone when it was built two decades ago and expanded in 2006.

The MRO would reshape Illinois’ third-largest airport with twin 9½-story hangars large enough to house Boeing 747-8 jets — the largest commercial aircraft built in the U.S. Most of the roughly 500 employees will be aviation mechanics for whom starting pay will be about $50,000 a year, Dunn said.

Most important, the MRO could recalibrate the regional economy, which is only beginning to recover from more than five years of double-digit unemployment rates. The Rockford area is home to more than 100 suppliers to the aerospace industry and an MRO could become a magnet for more. MROs are attractive to air cargo operators, and having one here could help diversify the city’s workforce with more aviation, logistics and warehousing jobs.

City, county and airport leaders are committed to raising their share of the project cost, Dunn said, but there’s no written agreement in place. A lease with AAR Corp. isn’t final, either. Nevertheless, Dunn said, AAR Corp. executives are committed to the project and he’s kept Mayor Larry Morrissey and County Board Chairman Scott Christiansen in the loop as behind-the-scenes talks to secure an MRO have waxed and waned for more than two years.

“We, as a community, don’t have the luxury of being risk averse,” Dunn said. “We have to take an educated, calculated risk to bring our community back to where it was economically.”

The MRO could have a $63.1 million annual economic impact on the region when it is fully operational and employing 500 workers at an average $55,000-a-year salary, according to an analysis by the Center for Governmental Studies at Northern Illinois University on behalf of Hinshaw & Culbertson, the law firm of the Greater Rockford Airport Authority. The construction alone — expected to begin next spring — is expected to create 550 jobs, the study says.

“This is one of the dreams come true for me,” Dunn said. “This is going to give kids from the city and the region who aren’t going to a four-year school an opportunity to get into a great program at Rock Valley College, get an (aviation maintenance) certification and go to work right away. ...It’s $50,000 a year right out of the chute.”

A Dunn deal

Dunn didn’t set out to attract an MRO to the city’s airport when he became its director in January 2012. The plan then was simply to lure more cargo business. He and the airport’s cargo director, Ken Ryan, went to Chicago to meet with executives of one of the largest cargo operators in the country, Atlas Air.

“Atlas said to us, ‘Everything is great with Rockford other than you don’t have a filling station there where we can get some maintenance work done. We’d like to fly our planes in, truck the cargo to Chicago and have our planes worked on while they’re (in Rockford).’ ”

But attracting an MRO, airport leaders realized, would require a large, stable pool of aviation mechanics — something Rockford didn’t have. Rock Valley College’s aviation maintenance program produces fewer than 50 graduates a year and Dunn got a cool response from then RVC-president Jack Becherer when he encouraged him to expand the program.

Dunn and officials at the Rockford Area Economic Development Corp. scoured the country for other aviation maintenance schools and found one that was interested in establishing a Rockford campus: Spartan College of Aeronautics & Technology in Tulsa, Oklahoma.

Dunn’s talks with Spartan were promising at first. But things fizzled last year when the school was bought by a Chicago venture capital firm whose executives weren’t keen on an immediate Rockford expansion. Airport and RVC leaders resumed talks after Becherer resigned in December, and the college broke ground last month on a $5.1 million, 40,000-square-foot education building that will share a parking lot with the airport’s MRO facility and allow RVC to graduate 150 aviation mechanics a year.

All the while, Dunn worked with AAR executives to craft a deal. He went to Washington to enlist the help of Durbin and met several times with Gov. Quinn and state economic development leaders to lobby for funding to build an MRO facility for AAR.

Expanding RVC’s aviation program was key to closing the deal, he said.

“We started focusing on nothing but cargo,” Dunn said. “Cargo led to the MRO and that led to the whole Spartan deal, which led to Rock Valley, which led to the MRO.”

Funding still fluid

Airport and AAR leaders are drafting a lease agreement for the MRO facility and the city, county and airport are developing a precise cost-sharing plan to prepare in advance of a spring groundbreaking, Dunn said.

The state will contribute $15 million toward construction from the Build Illinois bond program, which promotes economic development and job creation, said Dave Roeder, spokesman for the state Department of Commerce and Economic Opportunity. Illinois will give AAR Corp. an additional $600,000 for job training, he said.

“Rockford is on a roll, and this announcement is further proof that Rockford has what businesses want — good location, great transportation and above all a highly trained and motived workforce,” said Gov. Quinn in a written statement.

The city has been asked to contribute $5 million toward construction, plus an as-yet-undetermined operating subsidy for AAR in the form of property tax abatements, Morrissey said.

The city would likely tap its Global Trade Park tax increment finance district — a special development zone surrounding the airport that generates property tax revenue to pay for redevelopment projects. Other sources could include federal Community Development Block Grants and the variety of funding sources, including sales taxes, that support the city’s annual capital improvement plan.

“This is still very fluid,” Morrissey said. “The details are only emerging on this in terms of a total price tag for the city and the other partners. What I can say is that I’m very positive this will be a good deal for taxpayers. I’m confident we can work with the City Council to put together a package that is reasonable and manageable for us.”

The MRO is likely to attract additional aerospace business and cargo activity, which means more jobs and more prosperity for Rockford, the mayor said. And the combination of the MRO and RVC’s aviation training center allows the region to strengthen its brand as a hub for aerospace jobs and education, he said.

Winnebago County is being asked to contribute between $6 million and $7 million to the project, Christiansen said. The county will tap its host fee fund — supported by tipping fees on garbage haulers — to help underwrite the MRO project, he said. The county has already committed $1 million toward the construction of RVC’s aviation training center, which will share a parking lot on Cessna Drive with the future MRO facility.

“We’ve got to take a certain amount of risk and move on something like this,” said the County Board chairman. “The MRO is just the tip of the iceberg as far as I’m concerned. You’re going to see more air freight carriers locate here.

Isaac Guerrero: 815-987-1361; iguerrero@rrstar.com; @isaac_rrs

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